Greece is required to keep its deficit to 3.0 percent annually and inflation to the eurozone average of approximately 3.0 percent per year, though it is difficult to understand how this is legitimately accomplished when Athens jumped 30 places on the Cost of Living ranking done by Mercer, an independent institution producing the most comprehensive reports on the subject.

In January 2008, the National Statistic Service (NSS) admitted that inflation was at a 27-month high, however it is officially being quoted as 3.9 percent, though most know it’s more like 10 percent. Employers benefit greatly by using the lower figure, giving employees the absolute minimum raise, if any raise at all.

Is Greece expensive? In a word, ‘yes.’

Dairy products, which are already priced quite high with past increases of up to 40 percent, were set to rise 10 percent. Milk was supposed to be the exception, but findings show this to be untrue on paper and in real life. Increases were between 4.5 to 8.5 percent.

For those who are lactose intolerant or uninterested in cheese and milk, the price for eggs, flour and pasta rose 15 to 25 percent.

Want to keep warm this winter? It’ll cost you. The cost of electricity is up 7 percent as of December 2007, and oil is at a 14-month high because Greece is heavily dependent on it as a source of energy due to outdated heating systems and its failure to embrace greener practices. Add to this poorly built homes with little or no insulation, and you have a country that burns double the energy in winter compared to Sweden, which has a significantly colder climate. (See “Save money with off-peak electricity rates at DEH” to offset the burden).

If you manage to avoid spending money on oil and gas for the car, or choose to take public transportation for environmentally conscious reasons, a 10 percent increase is coming soon. Metro tickets may rise to 1 euro, which is actually a 25 percent increase, and the Transport Ministry is still in debate about other forms of transport. (* It has now been decided that all modes of transport will convert to an 80-cent ticket, which reflects no increase on the metro, a 60 percent increase for buses and trolleys, 33 percent rise for the tram, and 14 percent for the electrikos. This means the monthly card will drop back down to 35 euros on May 1st).

Bank charges are 10 times higher than the EU average, yet bank employees say they are underpaid (welcome to the club) and want a 10 percent raise (kali tyxi). There is also a looming threat of VAT being raised to 21 percent.

Consumers in Greece are being hit from all sides.

Why are prices so high? Cartels are one reason. Lack of competition another.

Rhetoric and recourse

After last year’s round of price hikes, Deputy Development Minister Yannis Papathanasiou said that “competition is working” and things are improving for the consumer. Really? The price he quoted for a liter of fresh milk has risen 61 percent from 0.85 to 1.37 in a year’s time.

The government also took loans in excess of the budgeted 35 billion euros in 2007, claiming it necessary to contend with debt brought on by destructive wildfires. Apparently the millions in EU funds and donations from the worldwide community wasn’t enough.

But the consumer is to blame as well. The average resident in Greece will either never admit (s)he can’t afford these prices or simply draw on hidden money from tax dodging or participation in the corruption that fuels these price increases. This apathy and arrogance not only feed Greece’s economic decline, but also perpetuate it.

This is not a country-to-country Greece vs. USA comparison; this will be published on the one-year anniversary of the original in June. This is an Athens, Greece vs. Athens, Greece comparison to measure real inflation (see title of this post).

It is not about finding “the cheapest possible.” It is about comparing the same exact items of the same brand from the same store or provider six months ago with prices today. It is about the reality of inflation from the ground.

If inflation is really only 3.9 percent, it should reflect this fact no matter what items are on the list.

Reading the table

All measurements are in metric, and all prices are in euros (€) — this is Greece, after all. Each section is subtotaled, and the percentage next to those amounts shows price increases in green and decreases in red. The percentage is calculated per category, not per item, though you are free to do those calculations on your own. I invested quite enough time compiling and coding this data.

Price decreases in electronic media were recorded, and this is a step in the right direction since they were incredibly inflated to begin with.

Other price fluctuations are understandable on some vegetables and fruits being out of season and therefore higher, but this cannot be the explanation for year-round products or in-season produce.

Also keep in mind that food firms have announced they plan to increase prices again on 100 products in 2008. So in addition to the increases tallied in a mere six months, consumers in Greece can add look forward to adding another 18 percent.

ITEM

June

Dec

Beverages

Fanta, 1.5 liter

1.45

1.45

Coke, 1.5 liter

1.45

1.45

Orange juice, 1 liter

1.40

1.70

+6.98%

4.30

4.60

Dairy

Fage milk, 1.5 liters

1.98

2.05

Total plain yogurt, 200 g

1.18

1.20

Lurpak salted butter, 250 g

2.59

2.97

Unsalted butter, 250 g

1.19

0.94

Margarine, 1 kilo

0.70

0.79

12 large eggs

2.36

2.94

Philadelphia cheese, 200 g

1.76

1.89

Kerrygold cheddar, 200 g

1.85

2.15

Ricotta, 250 g

1.70

1.85

Sour cream, 150 g

2.59

2.78

Haagen Dazs, 500 ml

6.27

6.32

+9.94%

23.54

25.88

Basics

Rice, 500 g

0.37

0.37

Sugar, 1 kilo

0.84

0.84

Fructose, 400 g

1.84

2.15

Flour, 1 kilo

0.60

0.68

+10.7%

3.65

4.04

Complex carbs

Kellogg’s Frosted Flakes, 500 g

3.67

3.62

Katelis Bread (white sliced), 350 g

1.42

1.62

Bread (unsliced oval loaf)

0.50

0.74

El Paso Tortillas (8)

2.11

2.18

Lay’s Salt vinegar chips, 130 g

1.11

1.17

+5.9%

8.81

9.33

Pasta

Tomato Sauce, 1.5 liter

0.92

0.92

Barilla sauce, 380 ml

1.99

1.99

Barilla spaghetti, 1 kilo

1.20

1.96

Kyknos whole peeled tomatoes, 400 g

0.63

0.68

+17.2%

4.74

5.55

Meat

Chicken breast, 1 kilo

8.17

11.71

Chicken drumsticks, 1 kilo

3.98

6.12

Ground beef, 1 kilo

8.48

7.68

Pork top loin boneless, 1 kilo

7.64

7.33

Turkey breast, 1 kilo

6.30

8.30

Bacon, 1 kilo

9.67

9.67

Cooked ham (counter), 1 kilo

13.59

13.98

Hot dogs, 340 g

1.89

1.99

+11.82%

59.72

66.78

Fresh produce

Broccoli, 1 kilo

2.59

1.29

Zucchini, 1 kilo

1.29

2.19

Green beans, 1 kilo

2.89

2.89

Carrots, 1 kilo

0.43

0.82

Spinach, 1 kilo

1.29

1.72

Yellow pepper, 1 kilo

3.39

2.98

Onion, 1 kilo

0.66

0.64

Potatoes, 1 kilo

0.67

0.70

Tomatoes, 1 kilo

1.49

1.69

Apples, 1 kilo

1.32

1.34

Bananas, 1 kilo

1.69

1.49

Pears, 1 kilo

1.79

2.29

Grapes (red seedless), 1 kilo

2.98

6.98

+20.2%

22.48

27.02

Condiments

Salt, 500 g

0.15

0.15

Pepper, 50 g

0.49

0.49

White vinegar, 500 ml

1.22

1.23

Ketchup Heinz, 340 g

1.37

1.42

Knorr chicken cubes (12)

1.77

1.62

Marmalade

1.89

2.17

+2.76%

6.89

7.08

Frozen

Frozen Pizza, 320 g

2.51

2.95

Frozen green beans, 450 g

1.41

1.55

Frozen peas, 500 g

1.41

1.55

+13.5%

5.33

6.05

Toiletries

Colgate med head toothbrush, massager

2.82

2.82

Oral B satin floss, 25 m

3.27

3.27

Colgate total whitening, 75 ml

2.39

2.69

Listerine cool mint, 500 ml

6.95

6.89

Fructis 2 in 1 shampoo, 400 ml

4.00

4.75

Dove beauty bar, 100 g

0.87

0.89

Mach 3 Turbo, 8 refills

14.99

13.64

Gillette shaving gel Ultra comfort, 200 ml

3.23

3.99

+1.09%

38.52

38.94

Kitchen & Paper

Palmolive ultra, regular, 1250 ml

2.82

2.84

Scotch Brite blue sponge

1.07

0.96

Kleenex toilet paper (12) single rolls

6.36

6.30

-1.46%

10.25

10.10

Media

iPod (nano) 4 GB – sale

183.00

164.00

Apple keyboard

59.00

63.00

TDK CD-R 700 MB 52x (50)

11.95

11.49

“Cake” of DVD-R Verbatim (50)

15.50

13.95

Sony memory stick 1 GB pro duo

29.00

29.00

Sony 4 GB pro duo

69.00

69.00

Sony 8 GB pro duo – sale

169.00

139.00

-8.76%

536.45

489.44

Medical

Private doctor’s appt

50.00

55.00

Chiropractor

80.00

85.00

Birth control pills, 1 month

>2.80

>2.80

Botox injection

300.00

325.00

+8.09%

432.80

467.80

Maintenance

Men’s haircut, no tip

13.00

16.00

– N. suburbs Greek stylist (not a barber)

Women’s haircut, incl 20% tip

65.00

65.00

– UK stylist in Glyfada vs. Manhattan stylist

+3.85%

78.00

81.00

Transportation

Bus, metro/subway, tram

– All modes single ticket (valid 90 min)

1.00

1.00

– All modes monthly pass

35.00

38.00

+8.33%

36.00

39.00

Communications

Cable TV (Nova)

56.40

57.00*

– 49 channels (then) vs. 46 channels (now)

*Has 3 less channels

per channel +6.96%

1.15

1.23

Basic Phone Service (PSTN)

– OTE monthly: 34.91 install, per call charge

±0

14.76

14.76

High speed internet (Forthnet)

– 8 mbps

48.50

48.50*

* Sale price 26.90

±0

48.50

48.50

Cell phone subscription

Vodafone

– 300 min

44.50

44.50

– 900 min

113.00

113.00

– Cheapest domestic sms

0.07

0.07*

– Cheapest overseas sms

0.20

0.20*

*With programs

doesn’t include 19% tax

±0

255.94

255.94

Comparison protocol

1. Services were compared on a regular monthly rate under normal circumstances. Special limited time offers or bundle deals were not used unless it was the only price listed.

2. Prices for all products were surveyed during the week of December 22, 2007, the six-month anniversary of the original survey on June 22, 2007.

3. Prices were surveyed by the same Greek citizens (not my pro-American fiancé) from June 2007 and myself.

I think you’re confused or not paying attention. This is a comparison of Athens vs. Athens, 6 months ago vs. today’s prices to measure inflation.

The last comparison was an Athens, Greece vs. New York/CA, USA country-to-country comparison. Totally different things. I won’t do another Greece vs. USA comparison until June, which is the anniversary of the first.

Katalaves? 😉

—
OK, but I never published any previous price increases, so I’m not sure what “last ones” in your first comment refers to. The only price list I ever published was the Greece vs. USA price comparison, which had nothing to do with inflation or price increases, only to show the gap in prices between two countries (as you know).

i agree it’s unreasonable; you’ll get no argument from me there. it’s a shame, but the same thing is starting to happen here too, albeit to a lesser degree. i wonder how the states is going in this regard.

This is excellent work, Kat! One or two caveats: seasonal produce is best avoided in these calculations of retail price indices; and hi-tech things usually go down in price, so they distort the figures too.

One point strikes me quite clearly: the major price increases are in Greek-produced goods, whereas imported goods (I think I can tell which are) have low inflation. Why is this important? Because it suggests that the problem is not in the retail sector, but in the production mechanism of the Greek economy itself. The implication of this, is that refusing to buy such goods will just put the companies out of business, rather than pressuring them to reduce prices.

The average increases, excluding the “difficult sectors” I mentioned, seem to imply an annual rate of at least 20%. I suspect that for the last 10 years, the RPI has been over 10% p.a. and cumulatively this has been a disaster for the wage/price ratio.

Why has this happened? Well, the obvious explanation, in line with standard economic theory, is that Greece should not be in the Eurozone. This was clear to me in the late 1990s, and should have been obvious to all economists and politicians responsible for macroeconomic policy. The evidence is that they put politics before reality, and (as usual) ****ed Greece with that. A contributing factor to the problem in the last 8 years or so, is that in the 1990s Albanians and others were cheap labour, badly exploited and keeping the businesses afloat. This occurred even to the extent of making the Greek owners rich, but not putting the profits back to modernise and make more efficient their businesses. In recent years, Albanian workers in particular have been able to secure higher wages, almost to Greek levels, so their cheap labour has mostly gone.

One interesting point: in every other EU country, the economists in universities, research centres, banks etc, conduct serious research [along the lines of yours, but in more detail] in order to check the validity of government figures. Isn’t it strange how Greek universities do nothing to challenge the state? Or how the private banks have nothing useful to say? The politicians just carry on with their false data and manipulations, and nobody says anything. Great.

“One point strikes me quite clearly: the major price increases are in Greek-produced goods, whereas imported goods (I think I can tell which are) have low inflation.”

interestingly enough, the Greek government claims that inflation is ‘imported’ from overseas. 😉

“Why is this important? Because it suggests that the problem is not in the retail sector, but in the production mechanism of the Greek economy itself. The implication of this, is that refusing to buy such goods will just put the companies out of business, rather than pressuring them to reduce prices.”

But the two are connected right? And how valid is that implication? i always assumed the relentless price gouging had little to do with anything else other than plain old fashioned greed. Or maybe that’s what you are saying and i’ve just misunderstood 😉

what is interesting though, is that private consumption in Greece, as a percentage of GDP, has been declining for the last 2-3 years in a manner which suggests it’s the beginning of a general trend. considering that private consumption is one of the few engines of ‘growth’ in the Greek economy, it’s obviously a worry.

my prediction is that Greece will either be forced to open itself eventually to ‘competition’, and become truly globalised in the proper, meaningful sense, or they will just have to increase income tax heavily in the future. Because once those EU funds dry up, i’m not sure how they are going to keep things going in a country whre tax cheating is a national sport.

I find your suggestion that Greece should not be in the EUROZONE very interesting.
In the past Greece was able to periodically devalue the Drachma to make its exports more competitive.With the advent of the EURO this is no longer possible.

The people need to understand this but first it must be embraced by the intellectual elite.

The real culprit of troubles in the Greek economy remains the inability of the system to modernize. Rampant bureaucracy and corruption, a failing educational system and a worldwide slowdown in economic growth (oil prices play their part) are the reasons why the greek consumer will feel increasingly under pressure.

It’s sad to think that only 10 years ago, with 250-300K Dramchae you were set.

Y – I thought about doing a USA vs. USA inflation comparison, but I honestly didn’t have time and think the window for that has passed. We’ll just see in June.

C – This keeps swirling in my head so I’ll post it. I noticed the price of cheese and milk has gone up again since I did this survey on Dec. 22, but we’ll leave it for June. To give you an answer about spinach and other items that fluctuate despite being in season, it not only depends on season, but also availability, “market price” and where it came from. So the week I surveyed, it was 1.79 perhaps because it was imported or AB had to pay extra to an enterprising farmer, etc. It’s back down to 1.29 this week. Too many variables, which shows Greece’s vulnerability and dependence.

M – As usual, you make very interesting points. I want to highlight something you said, namely that the government is blaming imports for higher prices when in fact that’s a lie. If you look at the imported items, nearly all of them stayed stable or went down in price. The exception is pasta from Italy, but they were very transparent in announcing that durum wheat was affected by climate change and price hikes would indeed reflect that.

To a point, I also believe Greece should exit the eurozone and perhaps the EU. The country initially believed it would benefit from EU subsidies, grants and funding, however all they’ve done is abuse this assistance and pay it all back with penalty, thus sending this economy into further turmoil, lining the pockets of the rich and corrupted, and passing the consequences to the everyday man, which these funds were originally supposed to benefit.

T – Nice to see you here again! Please comment more if you wish. Don’t you think that Greece would spiral downward much faster if it had the chance to devalue its own currency instead of being held accountable to the EU?

And yes, I remember those days. I arrived here when that was possible and the U.S. dollar was quite strong, as well. That’s but a memory now.

Yiannos (and others): to be honest, I am horrified by the thought that the price increases are probably NOT caused by greed. I say this, because we can more or less try to control greed and either boycott the perpetrators or legislate. My fear is that the inflation in domestic prices is fundamentally self-propagating, and necessary, and nothing can be done about it in the short/medium run.

Concerning Greek membership of the eurozone: the idea was, I suppose, that price competition from imported EU goods would stop domestic price inflation. The Italian experience of the 1990s was that they ended up with a 2-sector economy, consisting of domestic low-productivity goods and traded [although domestically produced] goods. This seems to have happened in Greece now. The logical outcome is that shops should sell mainly foreign [cheaper] produce and Greek production should cease: if that happened, Greek unemployment would go through the roof (and the government would fall through the floor).

Really, there should have been a phased transition to the Euro, and Eurostat should have put monitors on the Greek inflation indices. Ha! The EU is as useless as the Greek state: what am I thinking of, here?

I was wondering if anyone was aware if the prices in Athens are the cheapest in Greece. The reason for my asking is that I would like to move to Greece but to Ioannina. I would figure the distance would make it more expensive. Any comment would be appreciated 🙂

Price levels are only partially determined by cost levels in any country: what is equally important is the nature of demand. In Greece, historically, demand has driven up prices much more than costs have. Now, we have the great benefit of both! To try to answer your question: some things are likely to be more expensive outside Athens (because of transport fuel costs), other things will be cheaper than in Athens. I am guessing here, but possibly local imports from Albania and Bulgaria will help keep down prices in the North. Here in Athens, the supermarkets refuse (for example) to sell Bulgarian wine which is excellent and a fraction of the cost of Greek wine.

By the way, did anyone else pick up on Alogoskoufis’s lie that Greek inflation is caused by imported goods?

A – It should be clear from many articles and comments on this site that Greece is a ‘results may vary’ country where anything (good or bad) is possible. I repeat this phrase many times, and commentators echo what I say. Therefore, logic doesn’t apply. It’s completely subjective.

M – Yes, I did, and I believe I agreed with you in an earlier comment. Besides that, the table I put together illustrates that quite well. What would be news is if a Greek politician DIDN’T blame someone else/another country and actually told the truth. 😉 Cheers!

Kat said : “To a point, I also believe Greece should exit the eurozone and perhaps the EU”

I think that would have more negative effects than positive and is quite an exaggerated response.

Kat Reply:April 15th, 2008 at 19:25

Not really sure why you’re singling me out, since it was FMS’s suggestion to begin with and many others (also men) agreed with him and found it an interesting idea. Or do you only pick on women who happen to be American? I agree that would have a negative effect in some ways, which is the reason I said I agree “to a point”; but perhaps drastic shock is what it needs since “reform” hasn’t worked (Yiannos has said the same thing in other comments).

Also you’re in Cyprus.

*2009: Better to leave voluntarily than be kicked out since Greece entered under false pretenses and falsified stats to begin with.

I am not sure that Greece would benefit from leaving the Eurozone: I am pretty sure it would have benefited from a delayed entry. There are some things that cannot be undone, and Greece has a habit of engaging in these mistakes.

Thank you so much for such a wonderful site. You receive a lot of heartfelt thanks from many which is a blessing 🙂

I have a question: What happens to my money in the bank in EUR currency if Greece goes out of euro zone? What may the conversion rate be? Do you suggest any precautionary measures like moving it to another country? (I currently live in USA).

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